A graduate degree doesn't guarantee you'll get rich

Advanced degrees have
their advantages, but they aren't a prescription for
wealth.Flickr
/ Matt Cardy

Once upon a time, becoming a white-collar professional like a
doctor, lawyer, or college professor meant you would be rich — or
at least, richer than most everyone else.

Today, things are a little different.

Students are still choosing to attend law school, medical school,
business school, or to pursue a Ph.D. The National
Center for Education Statistics reports that schools are
expected to award 821,000 master's degrees and 177,500
doctoral degrees in 2015.

Next, the salaries.

The
BLS reports that holders of a doctoral or professional
degree earn an average of $96,420 a year, and holders of a
master's degree earn an average of $63,400 a year. Using BLS
data on some of the better-known white-collar occupations, here's
the
average annual salary of:

Postsecondary teachers (college instructors and professors,
not broken down by subject): $75,780

Lawyers: $133,470

CEOs: $180,700

Physicians and surgeons: $194,990

Compared to the average annual wage of all US workers
— $47,230
— those are impressive figures.
However, things aren't as great as the dollars and cents seem.
First of all, there's the problem of getting the jobs that pay.
The New York Times reports that only 40% of law-school grads
from the class of 2010 are working at law firms, and that the
class is experiencing a 6% unemployment rate.

In the six years since the
Great Recession, real year-over-year faculty salaries have
declined 0.12 percent. Despite occurring in a period of
relatively low inflation, the overall increase in average salary
for continuing faculty exceeded the cost of living by 1.05
percent in the years since the Great Recession.

Plus, academia is a competitive field. For example,
consider the
essay published on Buzzfeed by adjunct college professor
Matt Debenham, who makes more at his second job at the
grocery store than at the job for which he was trained.

Doctors may have the brightest outlook, in that specialists like
anesthesiologists and surgeons earn the highest annual median
wages in the US — $246,320 and
$240,440, respectively — followed by many of their med-school
peers.

Still, the path to high earnings is a difficult one for doctors,
who spend more time in school than almost anyone else. If you
consider their first years out of class as their first on the
job, their starting salaries aren't so high. At the Atlantic,
James Hamblin, MD, writes that doctors, who spend most of
their 20s in residency furthering their schooling, earn
relatively little early in their careers. He cites data from
Medscape:

On the website
KevinMD.com, Matthew Moller, MD, provides an in-depth
explanation of his situation, holding a massive amount of
debt but not yet earning the salary he needs to make a dent — and
because it earns interest, the longer you hold debt, the more you
ultimately pay overall:

$196,000. That was the bill, for the tuition, the tests, the
books, the late night pizza. $196,000 financed through a
combination of student loans, personal loans, and high-interest
credit cards, now consolidated, amalgamated, homogenized into one
life-defining number for my personal convenience.

I then relocated to Michigan and moved into a small condo in Ann
Arbor, where I started my residency. As a resident in Internal
Medicine, I earned a salary of $39,000. All the while, interest
continued to accrue on my mother-lode of debt at the rate of
$6000 per year due to the high debt burden. Paying down this debt
was not possible while raising two children. My wife began
working, but her meager salary as a teacher was barely enough to
cover day care costs. During residency, my costs for taking
licensing examinations, interviewing for specialty training
positions, and interest on the large loan ballooned my debt
further, now exceeding $230,000, all before I began my career as
a "real doctor."

Moller's experience is his own and not applicable to every grad,
but it makes a strong point: When you have crushing debt, a good
job and high earning potential aren't always a cure-all.